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Hnr Block Taxes

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Hnr Block Taxes

Hnr block taxes Publication 80 - Main Content Table of Contents Introduction 1. Hnr block taxes Employer Identification Number (EIN) 2. Hnr block taxes Who Are Employees?Tests. Hnr block taxes Business Owned and Operated by Spouses Farm Crew Leaders 3. Hnr block taxes Employee's Social Security Number (SSN)Registering for SSNVS. Hnr block taxes 4. Hnr block taxes Wages and Other CompensationFringe Benefits 5. Hnr block taxes TipsOrdering rule. Hnr block taxes 6. Hnr block taxes Social Security and Medicare Taxes for FarmworkersThe $150 Test or the $2,500 Test 7. Hnr block taxes How To Figure Social Security and Medicare TaxesHousehold and agricultural employers. Hnr block taxes 8. Hnr block taxes Depositing TaxesPayment with Return When To Deposit How To Deposit Deposit Penalties 9. Hnr block taxes Employer's ReturnsReporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Prior Period Adjustments 10. Hnr block taxes Wage and Tax StatementsWaiver. Hnr block taxes 11. Hnr block taxes Federal Unemployment (FUTA) Tax—U. Hnr block taxes S. Hnr block taxes Virgin Islands Employers Only How To Get Tax Help Introduction This publication is for employers whose principal place of business is in the U. Hnr block taxes S. Hnr block taxes Virgin Islands, Guam, American Samoa, or the Commonwealth of the Northern Mariana Islands, or who have employees who are subject to income tax withholding for any of these jurisdictions. Hnr block taxes Employers and employees in these areas are generally subject to social security and Medicare taxes under the Federal Insurance Contributions Act (FICA). Hnr block taxes See section 6 and section 7 for more information. Hnr block taxes This publication summarizes employer responsibilities to collect, pay, and report these taxes. Hnr block taxes Whenever the term “United States” is used in this publication, it includes U. Hnr block taxes S. Hnr block taxes Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands. Hnr block taxes This publication also provides employers in the U. Hnr block taxes S. Hnr block taxes Virgin Islands with a summary of their responsibilities in connection with the tax under the Federal Unemployment Tax Act, known as FUTA tax. Hnr block taxes See section 11 for more information. Hnr block taxes Except as shown in the table in section 12, social security, Medicare, and FUTA taxes apply to every employer who pays taxable wages to employees or who has employees who report tips. Hnr block taxes This publication does not include information relating to the self-employment tax (for social security and Medicare of self-employed persons). Hnr block taxes See Publication 570, Tax Guide for Individuals With Income From U. Hnr block taxes S. Hnr block taxes Possessions, if you need this information. Hnr block taxes This publication also does not include information relating to income tax withholding. Hnr block taxes In U. Hnr block taxes S. Hnr block taxes Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, contact your local tax department for information about income tax withholding. Hnr block taxes See Publication 15 (Circular E), for information on U. Hnr block taxes S. Hnr block taxes federal income tax withholding. Hnr block taxes Comments and suggestions. Hnr block taxes   We welcome your comments about this publication and your suggestions for future editions. Hnr block taxes   You can write to us at the following address: Internal Revenue Service Tax Forms and Publications Division 1111 Constitution Ave. Hnr block taxes NW, IR-6526 Washington, DC 20224   We respond to many letters by telephone. Hnr block taxes Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence. Hnr block taxes    You can also send us comments from www. Hnr block taxes irs. Hnr block taxes gov/formspubs. Hnr block taxes Click on More Information and then click on Comment on Tax Forms and Publications. Hnr block taxes   Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax forms, instructions, and publications. Hnr block taxes 1. Hnr block taxes Employer Identification Number (EIN) An employer identification number (EIN) is a nine-digit number that the IRS issues. Hnr block taxes Its format is 00-0000000. Hnr block taxes It is used to identify the tax accounts of employers and certain other organizations and entities that have no employees. Hnr block taxes Use your EIN on all of the items that you send to the IRS and SSA for your business. Hnr block taxes If you do not have an EIN, you may apply for one online. Hnr block taxes Go to IRS. Hnr block taxes gov and click on the Apply for an EIN Online link under Tools. Hnr block taxes You may also apply for an EIN by calling 1-800-829-4933, (U. Hnr block taxes S. Hnr block taxes Virgin Islands only) or 267-941-1099 (toll call), or you can fax or mail Form SS-4, Application for Employer Identification Number, to the IRS. Hnr block taxes Do not use a social security number (SSN) in place of an EIN. Hnr block taxes If you do not have an EIN by the time a return is due, file a paper return and enter “Applied For” and the date that you applied for it in the space shown for the number. Hnr block taxes If you took over another employer's business, do not use that employer's EIN. Hnr block taxes You should have only one EIN. Hnr block taxes If you have more than one, write to the IRS office where you file your returns using the “without a payment” address in the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943. Hnr block taxes Or call the IRS Business & Specialty Tax Line at 1-800-829-4933 (U. Hnr block taxes S. Hnr block taxes Virgin Islands only) or 267-941-1000 (toll call). Hnr block taxes Persons who are deaf, hard of hearing, or have a speech disability (TDD/TTY users) in the U. Hnr block taxes S. Hnr block taxes Virgin Islands may call 1-800-829-4059. Hnr block taxes The IRS will tell you which EIN to use. Hnr block taxes For more information, see Publication 1635, Employer Identification Number: Understanding Your EIN, or Publication 583, Starting a Business and Keeping Records. Hnr block taxes 2. Hnr block taxes Who Are Employees? Generally, employees are defined either under common law or under special statutes for certain situations. Hnr block taxes See Publication 15-A, Employer's Supplemental Tax Guide, for details on statutory employees and nonemployees. Hnr block taxes Employee status under common law. Hnr block taxes   Generally, a worker who performs services for you is your employee if you can control what will be done and how it will be done. Hnr block taxes This is so even when you give the employee freedom of action. Hnr block taxes What matters is that you have the right to control the details of how the services are performed. Hnr block taxes See Publication 15-A for more information on how to determine whether an individual providing services is an independent contractor or an employee. Hnr block taxes    Generally, people in business for themselves are not employees. Hnr block taxes For example, doctors, lawyers, veterinarians, and others in an independent trade in which they offer their services to the public are usually not employees. Hnr block taxes However, if the business is incorporated, corporate officers who work in the business are employees of the corporation. Hnr block taxes   If an employer-employee relationship exists, it does not matter what it is called. Hnr block taxes The employee may be called an agent or independent contractor. Hnr block taxes It also does not matter how payments are measured or paid, what they are called, or if the employee works full or part time. Hnr block taxes Statutory employees. Hnr block taxes   There are also some special definitions of employees for social security, Medicare, and FUTA taxes. Hnr block taxes   While the following persons may not be common law employees, they are considered employees for social security and Medicare purposes if the conditions under Tests , discussed later, are met. Hnr block taxes a. Hnr block taxes   An agent (or commission) driver who delivers food or beverages (other than milk) or picks up and delivers laundry or dry cleaning for someone else. Hnr block taxes b. Hnr block taxes   A full-time life insurance salesperson who sells primarily for one company. Hnr block taxes c. Hnr block taxes   A homeworker who works by the guidelines of the person for whom the work is done, with materials furnished by and returned to that person or to someone that person designates. Hnr block taxes d. Hnr block taxes   A traveling or city salesperson (other than an agent-driver or commission-driver) who works full time (except for sideline sales activities) for one firm or person getting orders from customers. Hnr block taxes The orders must be for merchandise for resale or supplies for use in the customer's business. Hnr block taxes The customers must be retailers, wholesalers, contractors, or operators of hotels, restaurants, or other businesses dealing with food or lodging. Hnr block taxes Tests. Hnr block taxes   Withhold social security and Medicare taxes from statutory employees' wages if all three of the following tests apply. Hnr block taxes The service contract states or implies that almost all of the services are to be performed personally by them. Hnr block taxes They have little or no investment in the equipment and property used to perform the services (other than an investment in transportation facilities). Hnr block taxes The services are performed on a continuing basis for the same payer. Hnr block taxes Persons in a or d, earlier, are also employees for FUTA tax purposes if tests 1 through 3 are met (U. Hnr block taxes S. Hnr block taxes Virgin Islands only). Hnr block taxes   Publication 15-A gives examples of the employer-employee relationship. Hnr block taxes Statutory nonemployees. Hnr block taxes   Certain direct sellers, qualified real estate agents, and certain companion sitters are, by law, considered nonemployees. Hnr block taxes They are generally treated as self-employed for employment tax purposes. Hnr block taxes See Publication 15-A for details. Hnr block taxes H-2A agricultural workers. Hnr block taxes   On Form W-2, do not check box 13 (Statutory employee) as H-2A workers are not statutory employees. Hnr block taxes Treating employees as nonemployees. Hnr block taxes   If you incorrectly treated an employee as a nonemployee and did not withhold social security and Medicare taxes, you will be liable for the taxes. Hnr block taxes See Treating employees as nonemployees in section 2 of Publication 15 (Circular E), for details on Internal Revenue Code section 3509, which may apply. Hnr block taxes IRS help. Hnr block taxes   If you want the IRS to determine if a worker is an employee, file Form SS-8, Determination of Worker Status for Purposes of Federal Employment Taxes and Income Tax Withholding. Hnr block taxes Voluntary Classification Settlement Program (VCSP). Hnr block taxes   Employers who are currently treating their workers (or a class or group of workers) as independent contractors or other nonemployees and want to voluntarily reclassify their workers as employees for future tax periods may be eligible to participate in the VCSP if certain requirements are met. Hnr block taxes To apply, use Form 8952, Application for Voluntary Classification Settlement Program (VCSP). Hnr block taxes For more information, visit IRS. Hnr block taxes gov and enter “VCSP” in the search box. Hnr block taxes Business Owned and Operated by Spouses If you and your spouse jointly own and operate a business and share in the profits and losses, you are partners in a partnership, whether or not you have a formal partnership agreement. Hnr block taxes See Publication 541, Partnerships, for more details. Hnr block taxes The partnership is considered the employer of any employees, and is liable for any employment taxes due on wages paid to its employees. Hnr block taxes Exception—Qualified Joint Venture. Hnr block taxes   If you and your spouse materially participate as the only members of a jointly owned and operated business, and you file a joint Form 1040, U. Hnr block taxes S. Hnr block taxes Individual Income Tax Return, or joint Form 1040-SS, U. Hnr block taxes S. Hnr block taxes Self-Employment Tax Return—U. Hnr block taxes S. Hnr block taxes Virgin Islands, Guam, American Samoa, the Commonwealth of the Northern Mariana Islands, or Puerto Rico, you can make a joint election to be taxed as a qualified joint venture instead of a partnership. Hnr block taxes See the Instructions for Schedule C (Form 1040) or the Instructions for Form 1040-SS. Hnr block taxes Spouses electing qualified joint venture status are treated as sole proprietors for federal tax purposes. Hnr block taxes Either of the sole proprietor spouses may report and pay the employment taxes due on wages paid to the employees, using the EIN of that spouse’s sole proprietorship. Hnr block taxes For more information on qualified joint ventures, visit IRS. Hnr block taxes gov and enter “qualified joint venture” in the search box. Hnr block taxes Farm Crew Leaders You are an employer of farmworkers if you are a crew leader. Hnr block taxes A crew leader is a person who furnishes and pays (either on his or her own behalf or on behalf of the farm operator) workers to do farmwork for the farm operator. Hnr block taxes If there is no written agreement between you and the farm operator stating that you are his or her employee, and if you pay the workers (either for yourself or for the farm operator), then you are a crew leader. Hnr block taxes 3. Hnr block taxes Employee's Social Security Number (SSN) An employee's social security number (SSN) consists of nine digits separated as follows: 000-00-0000. Hnr block taxes You must get each employee's name and SSN and enter them on Form W-2AS, W-2CM, W-2GU, or W-2VI. Hnr block taxes If you do not report the employee's correct name and SSN, you may owe a penalty unless you have reasonable cause. Hnr block taxes See Publication 1586, Reasonable Cause Regulations and Requirements for Missing and Incorrect Name/TINs, for information on the requirement to solicit the employee's SSN. Hnr block taxes Employee's social security card. Hnr block taxes   You should ask the employee to show you his or her social security card. Hnr block taxes The employee may show the card if it is available. Hnr block taxes Do not accept a social security card that says “Not valid for employment. Hnr block taxes ” A social security number issued with this legend does not permit employment. Hnr block taxes You may, but you are not required to, photocopy the social security card if the employee provides it. Hnr block taxes If an employee does not have a social security card or needs a new one, the employee should apply for one on Form SS-5 and submit the necessary documentation. Hnr block taxes The employee must complete and sign Form SS-5; it cannot be filed by the employer. Hnr block taxes You may be asked to supply a letter to accompany Form SS-5 if the employee has exceeded his or her yearly or lifetime limit for the number of replacement cards allowed. Hnr block taxes If your employee has applied for an SSN but has not received the card before you must file your Form W-2 reports, and you are filing your reports on paper, enter “Applied For” in box d. Hnr block taxes Enter all zeroes in the SSN field if filing electronically. Hnr block taxes When the employee receives the SSN, file Copy A of Form W-2c with SSA to show the employee's SSN. Hnr block taxes Correctly record the employee's name and SSN. Hnr block taxes   Record the name and number of each employee as they appear on his or her social security card. Hnr block taxes If the name is not correct as shown on the card (for example, because of marriage or divorce), the employee should request a corrected card from the SSA. Hnr block taxes Continue to use the old name until the employee shows you the replacement social security card with the corrected name. Hnr block taxes   If the SSA issues the employee a replacement card after a name change, or a new card with a different social security number after a change in alien work status, file a Form W-2c to correct the name/SSN reported on the most recently filed Form W-2AS, W-2CM, W-2GU, or W-2VI. Hnr block taxes It is not necessary to correct other years if the previous name and SSN were used for years before the most recent Form W-2. Hnr block taxes Where to get and file social security number application forms. Hnr block taxes    U. Hnr block taxes S. Hnr block taxes Virgin Islands—U. Hnr block taxes S. Hnr block taxes Social Security Administration, 8000 Nisky Center, First Floor, Suite 2, St. Hnr block taxes Thomas, VI 00802. Hnr block taxes  Guam—U. Hnr block taxes S. Hnr block taxes Social Security Administration, 655 Harmon Loop Road, Suite 300, Dededo, GU 96929. Hnr block taxes  American Samoa—U. Hnr block taxes S. Hnr block taxes Social Security Administration, Pago Plaza, Suite 117, Pago Pago, AS 96799. Hnr block taxes  Commonwealth of the Northern Mariana Islands—U. Hnr block taxes S. Hnr block taxes Social Security Administration, MH Building, Suite 201, Saipan, MP 96950. Hnr block taxes Verification of social security numbers. Hnr block taxes   Employers and authorized reporting agents can use the Social Security Number Verification Service (SSNVS) to instantly verify up to 10 names and SSNs (per screen) at a time, or submit an electronic file of up to 250,000 names and SSNs and usually receive the results the next business day. Hnr block taxes Visit www. Hnr block taxes socialsecurity. Hnr block taxes gov/employer/ssnv. Hnr block taxes htm for more information. Hnr block taxes Registering for SSNVS. Hnr block taxes   You must register online and receive authorization from your employer to use SSNVS. Hnr block taxes To register, visit SSA's website at www. Hnr block taxes ssa. Hnr block taxes gov/employer and click on the Business Services Online link. Hnr block taxes Follow the registration instructions to obtain a user identification (ID) and password. Hnr block taxes You will need to provide the following information about yourself and your company. Hnr block taxes Name. Hnr block taxes SSN. Hnr block taxes Date of birth. Hnr block taxes Type of employer. Hnr block taxes EIN. Hnr block taxes Company name, address, and telephone number. Hnr block taxes Email address. Hnr block taxes   When you have completed the online registration process, SSA will mail a one-time activation code to your employer. Hnr block taxes You must enter the activation code online to use SSNVS. Hnr block taxes 4. Hnr block taxes Wages and Other Compensation Generally, all wages are subject to social security and Medicare tax (and FUTA tax for U. Hnr block taxes S. Hnr block taxes Virgin Islands employers). Hnr block taxes However, wages subject to social security tax and FUTA tax are limited by a wage base amount that you pay to each employee for the year. Hnr block taxes The wage base for social security tax is $117,000 for 2014. Hnr block taxes After you pay $117,000 to an employee in 2014, including tips, do not withhold social security tax on any amount that you later pay to the employee for the year. Hnr block taxes The wage base for FUTA tax is $7,000 for 2014. Hnr block taxes All wages are subject to Medicare tax. Hnr block taxes The wages may be in cash or in other forms, such as an automobile for personal use. Hnr block taxes Wages include salaries, vacation allowances, bonuses, commissions, and fringe benefits. Hnr block taxes It does not matter how payments are measured or paid. Hnr block taxes See the table in section 12 for exceptions to social security, Medicare, and FUTA taxes on wages. Hnr block taxes See section 5 and section 6 for a discussion of how the rules apply to tips and farmworkers. Hnr block taxes Social security and Medicare taxes apply to most payments of sick pay, including payments by third parties such as insurance companies. Hnr block taxes Special rules apply to the reporting of third-party sick pay. Hnr block taxes For details, see Publication 15-A. Hnr block taxes Determine the value of noncash pay (such as goods, lodging, and meals) by its fair market value. Hnr block taxes However, see Fringe Benefits , later in this section. Hnr block taxes Except for farmworkers and household employees, this kind of pay may be subject to social security, Medicare, and FUTA taxes. Hnr block taxes Back pay, including retroactive wage increases (but not amounts paid as liquidated damages), is taxed as ordinary wages in the year paid. Hnr block taxes For information on reporting back pay to the Social Security Administration, see Publication 957, Reporting Back Pay and Special Wage Payments to the Social Security Administration. Hnr block taxes Travel and business expenses. Hnr block taxes   Payments to your employee for travel and other necessary expenses of your business generally are included in taxable wages if (a) your employee is not required to or does not substantiate timely those expenses to you with receipts or other documentation, or (b) you advance an amount to your employee for business expenses and your employee is not required to or does not return timely any amount that he or she does not substantiate. Hnr block taxes Sick pay. Hnr block taxes   In general, sick pay is any amount that you pay, under a plan that you take part in, to an employee because of sickness or injury. Hnr block taxes These amounts are sometimes paid by a third party, such as an insurance company. Hnr block taxes In either case, these payments are subject to social security and Medicare taxes (and FUTA tax for U. Hnr block taxes S. Hnr block taxes Virgin Islands employers). Hnr block taxes Sick pay becomes exempt from these taxes after the end of 6 calendar months after the calendar month the employee last worked for the employer. Hnr block taxes Publication 15-A explains the employment tax rules that apply to sick pay, disability benefits, and similar payments to employees. Hnr block taxes Fringe Benefits Generally, fringe benefits are includible in the gross income of an employee and are subject to employment taxes. Hnr block taxes Examples of fringe benefits include the use of an automobile, aircraft flights that you provide, free or discounted commercial airline flights, vacations, discounts on property or services, memberships in country clubs or other social clubs, and tickets to entertainment or sporting events. Hnr block taxes In general, the amount included in the employee's income is the excess of the fair market value of the benefit over the sum of any amount paid for it by the employee and any amount excluded by law. Hnr block taxes For more information, see Publication 15-B, Employer's Tax Guide to Fringe Benefits. Hnr block taxes When fringe benefits are treated as paid. Hnr block taxes   You can choose to treat certain noncash fringe benefits (including personal use of an automobile provided by you) as paid by the pay period, quarter, or on any other basis that you choose, but they must be treated as paid at least annually. Hnr block taxes You do not have to make a formal choice of payment dates or notify the IRS. Hnr block taxes You do not have to use the same basis for all employees. Hnr block taxes You may change methods as often as you like, as long as all benefits provided in a calendar year are treated as paid no later than December 31 of the calendar year. Hnr block taxes However, see Special accounting rule for fringe benefits provided during November and December , later in this section. Hnr block taxes   You can treat the value of a single taxable noncash fringe benefit as paid on one or more dates in the same calendar year, even if the employee gets the entire benefit at one time. Hnr block taxes However, once you elect the payment dates, you must report the taxes on your return in the same tax period in which you treated them as paid. Hnr block taxes This election does not apply to a fringe benefit where real property or investment personal property is transferred. Hnr block taxes Withholding social security and Medicare taxes on fringe benefits. Hnr block taxes   You add the value of fringe benefits to regular wages for a payroll period and figure social security and Medicare taxes on the total. Hnr block taxes   If you withhold less than the required amount of social security and Medicare taxes from the employee in a calendar year but report and pay the proper amount, you may recover the taxes from the employee. Hnr block taxes Depositing taxes on fringe benefits. Hnr block taxes   Once you choose payment dates for taxable noncash fringe benefits, you must deposit taxes in the same deposit period that you treat the fringe benefits as paid. Hnr block taxes You may make a reasonable estimate of the value of the fringe benefits. Hnr block taxes In general, the value of taxable noncash fringe benefits provided in a calendar year must be determined by January 31 of the following year. Hnr block taxes   You may claim a refund of overpayments or elect to have any overpayment applied to the next employment tax return. Hnr block taxes If deposits are underpaid, see Deposit Penalties in section 8. Hnr block taxes Valuation of vehicles provided to employees. Hnr block taxes    If you provide a vehicle to your employees, you may either determine the actual value of the benefit for the entire calendar year, taking into account the business use of the vehicle, or consider the entire use for the calendar year as personal and include 100% of the value of the vehicle in the employee's income. Hnr block taxes For reporting information to employees, see the box 14 instructions in the General Instructions for Forms W-2 and W-3. Hnr block taxes Special accounting rule for fringe benefits provided during November and December. Hnr block taxes   You may choose to treat the value of taxable noncash fringe benefits provided during November and December as paid in the next year. Hnr block taxes However, this applies only to those benefits that you actually provided during November and December, not to those you merely treated as paid during those months. Hnr block taxes   If you use this rule, you must notify each affected employee between the time of the employee's last paycheck of the calendar year and at or near the time that you give the employee Form W-2AS, W-2CM, W-2GU, or W-2VI. Hnr block taxes If you use the special accounting rule, your employee must also use it for the same period that you use it. Hnr block taxes You cannot use this rule for a fringe benefit of real property or tangible or intangible real property of a kind normally held for investment that is transferred to your employee. Hnr block taxes 5. Hnr block taxes Tips Tips that your employee receives from customers are generally subject to social security and Medicare withholding. Hnr block taxes Your employee must report cash tips to you by the 10th of the month after the month that the tips are received. Hnr block taxes The report should include tips you paid over to the employee for charge customers, tips the employee received directly from customers, and tips received from other employees under any tip-sharing arrangement. Hnr block taxes Both directly and indirectly tipped employees must report tips to you. Hnr block taxes The report should not include tips that the employee paid out to other employees. Hnr block taxes No report is required for months when tips are less than $20. Hnr block taxes Your employees report tips on Form 4070, Employee's Report of Tips to Employer, or on a similar statement. Hnr block taxes They may also use Form 4070A, Employee's Daily Record of Tips, to keep a record of their tips. Hnr block taxes Both forms are included in Publication 1244, Employee's Daily Record of Tips and Report to Employer, available at IRS. Hnr block taxes gov. Hnr block taxes The statement must be signed by the employee and must include: The employee's name, address, and SSN, Your name and address, The month or period that the report covers, and The total tips received during the month or period. Hnr block taxes You are permitted to establish a system for electronic tip reporting by employees. Hnr block taxes See Regulations section 31. Hnr block taxes 6053-1(d). Hnr block taxes Collecting taxes on tips. Hnr block taxes   You must collect the employee social security and Medicare taxes on the employee's tips. Hnr block taxes You can also collect these taxes from the employee's wages or from other funds that he or she makes available. Hnr block taxes Stop collecting the employee social security tax when his or her total wages and tips for 2014 reach $117,000. Hnr block taxes Collect the employee Medicare tax for the whole year on all wages and tips. Hnr block taxes   You are responsible for the employer social security tax on wages and tips until the wages (including tips) reach the wage base limit. Hnr block taxes You are responsible for the employer Medicare tax for the whole year on all wages and tips. Hnr block taxes File Form 941-SS (or Form 944) to report withholding and employer taxes on tips. Hnr block taxes The withholding rules for withholding an employee's share of Medicare tax on tips also apply to withholding the Additional Medicare Tax once wages and tips exceed $200,000 in the calendar year. Hnr block taxes Ordering rule. Hnr block taxes   If, by the 10th of the month after the month you received an employee's report on tips, you do not have enough employee funds available to deduct the employee social security and Medicare tax on tips, you no longer have to collect it and are not liable for it. Hnr block taxes Reporting tips. Hnr block taxes   Report tips and any collected and uncollected social security in boxes 1, 5, 7, and 12 on Forms W-2AS, W-2CM, W-2GU, or W-2VI and on Form 941-SS, lines 5b, 5c, and 5d (Form 944, lines 4b, 4c, and 4d). Hnr block taxes Do not include any uncollected Additional Medicare Tax in box 12 of Form W-2. Hnr block taxes Report an adjustment on Form 941-SS, line 9 (Form 944, line 6), for the uncollected social security and Medicare taxes. Hnr block taxes The table in section 12 shows how tips are treated for FUTA tax purposes. Hnr block taxes   Revenue Ruling 2012-18 provides guidance for employers regarding social security and Medicare taxes imposed on tips, including information on the reporting of the employer share of social security and Medicare taxes under section 3121(q), the difference between tips and service charges, and the section 45B credit. Hnr block taxes See Revenue Ruling 2012-18, 2012-26 I. Hnr block taxes R. Hnr block taxes B. Hnr block taxes 1032, available at www. Hnr block taxes irs. Hnr block taxes gov/irb/2012-26_IRB/ar07. Hnr block taxes html. Hnr block taxes 6. Hnr block taxes Social Security and Medicare Taxes for Farmworkers The tests described below apply only to services that are defined as agricultural labor (farmwork). Hnr block taxes In general, you are an employer of farmworkers if your employees: Raise or harvest agricultural or horticultural products on your farm (including the raising and feeding of livestock); Work in connection with the operation, management, conservation, improvement, or maintenance of your farm and its tools and equipment; Provide services relating to salvaging timber, or clearing land of brush and other debris, left by a hurricane (also known as hurricane labor); Handle, process, or package any agricultural or horticultural commodity if you produced over half of the commodity (for a group of up to 20 unincorporated operators, all of the commodity); or Do work for you related to cotton ginning, turpentine, gum resin products, or the operation and maintenance of irrigation facilities. Hnr block taxes For this purpose, the term “farm” includes stock, dairy, poultry, fruit, fur-bearing animal, and truck farms, as well as plantations, ranches, nurseries, ranges, greenhouses or other similar structures used primarily for the raising of agricultural or horticultural commodities, and orchards. Hnr block taxes Farmwork does not include reselling activities that do not involve any substantial activity of raising agricultural or horticultural commodities, such as a retail store or a greenhouse used primarily for display or storage. Hnr block taxes A “share farmer” working for you is not your employee. Hnr block taxes However, the share farmer may be subject to self-employment tax. Hnr block taxes In general, share farming is an arrangement in which certain commodity products are shared between the farmer and the owner (or tenant) of the land. Hnr block taxes For details, see Regulations section 31. Hnr block taxes 3121(b)(16)-1. Hnr block taxes The $150 Test or the $2,500 Test All cash wages that you pay to any employee for farmwork are subject to social security and Medicare taxes if either of the following two tests is met. Hnr block taxes You pay cash wages to the employee of $150 or more in a year (count all cash wages paid on a time, piecework, or other basis) for farmwork. Hnr block taxes The $150 test applies separately to each farmworker that you employ. Hnr block taxes If you employ a family of workers, each member is treated separately. Hnr block taxes Do not count wages paid by other employers. Hnr block taxes The total that you pay for farmwork (cash and noncash) to all of your employees is $2,500 or more during the year. Hnr block taxes Exceptions. Hnr block taxes   The $150 and $2,500 tests do not apply to wages that you pay to a farmworker who receives less than $150 in annual cash wages and the wages are not subject to social security and Medicare taxes even if you pay $2,500 or more in that year to all of your farmworkers if the farmworker: Is employed in agriculture as a hand-harvest laborer, Is paid piece rates in an operation that is usually paid on a piece-rate basis in the region of employment, Commutes daily from his or her home to the farm, and Had been employed in agriculture less than 13 weeks in the preceding calendar year. Hnr block taxes   Amounts that you pay to these seasonal farmworkers, however, count toward the $2,500-or-more test to determine whether wages that you pay to other farmworkers are subject to social security and Medicare taxes. Hnr block taxes 7. Hnr block taxes How To Figure Social Security and Medicare Taxes The tax rate for social security is 6. Hnr block taxes 2% (amount withheld) each for the employer and employee (12. Hnr block taxes 4% total). Hnr block taxes The social security wage base limit is $117,000. Hnr block taxes The tax rate for Medicare is 1. Hnr block taxes 45% (amount withheld) each for the employee and employer (2. Hnr block taxes 9% total). Hnr block taxes There is no wage base limit for Medicare tax; all covered wages are subject to Medicare tax. Hnr block taxes Multiply each wage payment by these percentages to figure the tax to withhold from employees. Hnr block taxes Employers report both the employee and employer shares on Forms 941-SS, 944, or Form 943 (farm employment). Hnr block taxes See section 5 for information on tips. Hnr block taxes Additional Medicare Tax withholding. Hnr block taxes   In addition to withholding Medicare tax at 1. Hnr block taxes 45%, you must withhold a 0. Hnr block taxes 9% Additional Medicare Tax from wages you pay to an employee in excess of $200,000 in a calendar year. Hnr block taxes You are required to begin withholding Additional Medicare Tax in the pay period in which you pay wages in excess of $200,000 to an employee and continue to withhold it each pay period until the end of the calendar year. Hnr block taxes Additional Medicare Tax is only imposed on the employee. Hnr block taxes There is no employer share of Additional Medicare Tax. Hnr block taxes All wages that are subject to Medicare tax are subject to Additional Medicare Tax withholding if paid in excess of the $200,000 withholding threshold. Hnr block taxes   For more information on what wages are subject to Medicare tax, see the chart Special Rules for Various Types of Employment and Payments in section 12. Hnr block taxes For more information on Additional Medicare Tax, visit IRS. Hnr block taxes gov and enter “Additional Medicare Tax” in the search box. Hnr block taxes Deducting the tax. Hnr block taxes   Deduct the employee tax from each wage payment. Hnr block taxes If you are not sure that the wages that you pay to a farmworker during the year will be taxable, you may either deduct the tax when you make the payments or wait until the $2,500 test or the $150 test explained in section 6 has been met. Hnr block taxes Employee's portion of taxes paid by employer. Hnr block taxes   If you pay your employee's social security and Medicare taxes without deducting them from the employee's pay, you must include the amount of the payments in the employee's wages for social security and Medicare taxes. Hnr block taxes This increase in the employee's wage payment for your payment of the employee's social security and Medicare taxes is also subject to employee social security and Medicare taxes. Hnr block taxes This again increases the amount of the additional taxes that you must pay. Hnr block taxes Household and agricultural employers. Hnr block taxes   This discussion does not apply to household and agricultural employers. Hnr block taxes If you pay a household or agricultural employee's social security and Medicare taxes, these payments must be included in the employee's wages. Hnr block taxes However, this wage increase due to the tax payments is not subject to social security or Medicare taxes as discussed in this section. Hnr block taxes See Publication 15-A for details. Hnr block taxes Sick pay payments. Hnr block taxes   Social security and Medicare taxes apply to most payments of sick pay, including payments made by third parties such as insurance companies. Hnr block taxes For details on third-party payers of sick pay, see Publication 15-A. Hnr block taxes 8. Hnr block taxes Depositing Taxes You must deposit social security and Medicare taxes if your tax liability (Form 941-SS, line 10; Form 944, line 7; or Form 943, line 11) is $2,500 or more for the tax return period. Hnr block taxes You must make the deposit by electronic funds transfer. Hnr block taxes For more information about electronic funds transfers, see How To Deposit , later in this section. Hnr block taxes Payment with Return $2,500 rule. Hnr block taxes   Instead of making deposits during the current quarter, you can pay your total Form 941-SS tax liability when you timely file Form 941-SS if: Your total Form 941-SS tax liability for either the current quarter or the preceding quarter is less than $2,500 and You do not incur a $100,000 next-day deposit obligation during the current quarter. Hnr block taxes   If you are not sure your total liability for the current quarter will be less than $2,500, (and your liability for the preceding quarter was not less than $2,500), make deposits using the semiweekly or monthly rules so you won't be subject to failure to deposit penalties. Hnr block taxes Employers who have been notified to file Form 944 can pay their tax liability due for the fourth quarter with Form 944, if their fourth quarter tax liability is less than $2,500. Hnr block taxes Employers must have deposited any tax liability due for the first, second, and third quarters, according to the deposit rules, in order to avoid failure-to-deposit penalties for deposits due during those quarters. Hnr block taxes Only monthly schedule depositors are allowed to make an Accuracy of Deposits Rule payment with the return. Hnr block taxes Semiweekly schedule depositors must timely deposit the amount. Hnr block taxes See Accuracy of Deposits Rule and How To Deposit, later in this section. Hnr block taxes When To Deposit Under the rules discussed below, the only difference between farm and nonfarm workers' employment tax deposit rules is the lookback period. Hnr block taxes Therefore, farm and nonfarm workers are discussed together except where noted. Hnr block taxes Depending on your total taxes reported during a lookback period (discussed later), you are either a monthly schedule depositor or a semiweekly schedule depositor. Hnr block taxes The terms “monthly schedule depositor” and “semiweekly schedule depositor” do not refer to how often you pay your employees or how often you are required to make deposits. Hnr block taxes The terms identify which set of rules that you must follow when a tax liability arises (for example, when you have a payday). Hnr block taxes You will need to determine your deposit schedule for a calendar year based on the total employment taxes reported on Forms 941-SS, line 10; Form 944, line 7; or Form 943, line 9, for your lookback period (defined below). Hnr block taxes If you filed both Forms 941-SS and 941 during the lookback period, combine the tax liabilities for these returns for purposes of determining your deposit schedule. Hnr block taxes Determine your deposit schedule for Form 943 separately from Forms 941-SS and 941. Hnr block taxes Lookback period for employers of nonfarm workers. Hnr block taxes   The lookback period for Form 941-SS (or Form 941) consists of four quarters beginning July 1 of the second preceding year and ending June 30 of the prior year. Hnr block taxes These four quarters are your lookback period even if you did not report any taxes for any of the quarters. Hnr block taxes For 2014, the lookback period is July 1, 2012, through June 30, 2013. Hnr block taxes    Table 1. Hnr block taxes Lookback Period for Calendar Year 2014 Lookback Period July 1, 2012 Oct. Hnr block taxes 1, 2012 Jan. Hnr block taxes 1, 2013 Apr. Hnr block taxes 1, 2013 through through through through Sep. Hnr block taxes 30, 2012 Dec. Hnr block taxes 31, 2012 Mar. Hnr block taxes 31, 2013 June 30, 2013    The lookback period for Form 944 is the second calendar year preceding the current calendar year. Hnr block taxes For example, the lookback period for calendar year 2014 is calendar year 2012. Hnr block taxes In addition, for employers who filed Form 944 for 2012 or for 2013 and will file Form 941-SS (or Form 941) for 2014, the lookback period for 2014 is the second calendar year preceding the current calendar year, that is, 2012. Hnr block taxes Lookback period for employers of farmworkers. Hnr block taxes   The lookback period for Form 943 is the second calendar year preceding the current calendar year. Hnr block taxes The lookback period for calendar year 2014 is calendar year 2012. Hnr block taxes Adjustments to lookback period taxes. Hnr block taxes   To determine your taxes for the lookback period, use only the tax that you reported on the original returns (Forms 941-SS, 943, or 944). Hnr block taxes Do not include any adjustments shown on Form 941-X, 943-X, or 944-X. Hnr block taxes Example. Hnr block taxes   An employer originally reported total taxes of $45,000 for the lookback period. Hnr block taxes The employer discovered during January 2014 that the tax reported during the lookback period was understated by $10,000 and corrected this error by filing Form 941-X. Hnr block taxes The employer is a monthly schedule depositor for 2014 because the lookback period tax liabilities are based on the amounts originally reported, and they were $50,000 or less. Hnr block taxes Deposit Period The term “deposit period” refers to the period during which tax liabilities are accumulated for each required deposit due date. Hnr block taxes For monthly schedule depositors, the deposit period is a calendar month. Hnr block taxes The deposit periods for semiweekly schedule depositors are Wednesday through Friday and Saturday through Tuesday. Hnr block taxes Monthly Deposit Schedule If your total tax reported for the lookback period is $50,000 or less, you are a monthly schedule depositor for the current year. Hnr block taxes You must deposit taxes on wage payments made during a calendar month by the 15th day of the following month. Hnr block taxes New employers. Hnr block taxes   Your tax liability for any quarter in the lookback period before the date you started or acquired your business is considered to be zero. Hnr block taxes Therefore, you are a monthly schedule depositor for the first calendar year of your business (but see the $100,000 Next-Day Deposit Rule , later in this section). Hnr block taxes Semiweekly Deposit Schedule If your total tax reported for the lookback period is more than $50,000, you are a semiweekly schedule depositor for the current year. Hnr block taxes If you are a semiweekly schedule depositor, you must deposit on Wednesday and/or Friday, depending on what day of the week that you make wage payments, as follows. Hnr block taxes Deposit taxes on wage payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Hnr block taxes Deposit taxes on wage payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday. Hnr block taxes Semiweekly depositors are generally not required to deposit twice a week if their payments were in the same semiweekly period unless the $100,000 Next-Day Deposit Rule , discussed later in this section, applies. Hnr block taxes For example, if you made a payment on both Wednesday and Friday and incurred taxes of $10,000 for each pay date, deposit the $20,000 on the following Wednesday. Hnr block taxes If you made no additional payments on Saturday through Tuesday, no deposit is due on Friday. Hnr block taxes Semiweekly deposit period spanning two quarters. Hnr block taxes   If you have more than one pay date during a semiweekly period and the pay dates fall in different calendar quarters, you will need to make separate deposits for the separate liabilities. Hnr block taxes Example. Hnr block taxes   If you have a pay date on Monday, March 31, 2014 (first quarter), and another pay date on Tuesday, April 1, 2014 (second quarter), two separate deposits will be required even though the pay dates fall within the same semiweekly period. Hnr block taxes Both deposits will be due on Friday, April 4, 2014 (3 business days from the end of the semiweekly deposit period). Hnr block taxes Examples of Monthly and Semiweekly Schedules Employers of nonfarm workers. Hnr block taxes   Rose Co. Hnr block taxes reported Form 941-SS taxes as follows: 2013 Lookback Period 3rd Quarter 2011 $12,000 4th Quarter 2011 12,000 1st Quarter 2012 12,000 2nd Quarter 2012 12,000   $48,000 2014 Lookback Period 3rd Quarter 2012 $12,000 4th Quarter 2012 12,000 1st Quarter 2013 12,000 2nd Quarter 2013 15,000   $51,000 Rose Co. Hnr block taxes is a monthly schedule depositor for 2013 because its taxes for the four quarters in its lookback period ($48,000 for the 3rd quarter of 2011 through the 2nd quarter of 2012) were not more than $50,000. Hnr block taxes However, for 2014, Rose Co. Hnr block taxes is a semiweekly schedule depositor because the total taxes for the four quarters in its lookback period ($51,000 for the 3rd quarter of 2012 through the 2nd quarter of 2013) exceeded $50,000. Hnr block taxes Employers of farmworkers. Hnr block taxes   Red Co. Hnr block taxes reported taxes on its 2012 Form 943, line 9, of $48,000. Hnr block taxes On its 2013 Form 943, line 11, it reported taxes of $60,000. Hnr block taxes   Red Co. Hnr block taxes is a monthly schedule depositor for 2014 because its taxes for its lookback period ($48,000 for calendar year 2012) were not more than $50,000. Hnr block taxes However, for 2015, Red Co. Hnr block taxes is a semiweekly schedule depositor because the total taxes for its lookback period ($60,000 for calendar year 2013) exceeded $50,000. Hnr block taxes New agricultural employers. Hnr block taxes   New agricultural employers filing Form 943 are monthly schedule depositors for the first and second calendar years of their business because their taxes for the lookback period (2 years) are considered to be zero. Hnr block taxes However, see the $100,000 Next-Day Deposit Rule , later in this section. Hnr block taxes Deposits on Business Days Only If a deposit due date falls on a day that is not a business day, the deposit is considered timely if it is made by the close of the next business day. Hnr block taxes A business day is any day other than a Saturday, Sunday, or legal holiday. Hnr block taxes For example, if a deposit is required to be made on Friday, but Friday is a legal holiday, the deposit is considered timely if it is made by the following Monday (if Monday is a business day). Hnr block taxes Semiweekly schedule depositors have at least 3 business days to make a deposit. Hnr block taxes If any of the 3 weekdays after the end of a semiweekly period is a legal holiday, you will have an additional day for each day that is a legal holiday to make the required deposit. Hnr block taxes For example, if a semiweekly schedule depositor accumulated taxes for payments made on Friday and the following Monday is a legal holiday, the deposit normally due on Wednesday may be made on Thursday (this allows 3 business days to make the deposit). Hnr block taxes Legal holiday. Hnr block taxes   The term “legal holiday” means any legal holiday in the District of Columbia. Hnr block taxes Legal holidays for 2014 are listed below. Hnr block taxes January 1—New Year's Day January 20—Birthday of Martin Luther King, Jr. Hnr block taxes February 17—Washington's Birthday April 16—District of Columbia Emancipation Day May 26—Memorial Day July 4—Independence Day September 1—Labor Day October 13—Columbus Day November 11—Veterans Day November 27—Thanksgiving Day December 25—Christmas Day Application of Monthly and Semiweekly Schedules The following examples illustrate the procedure for determining the deposit date under the two different deposit schedules. Hnr block taxes Monthly schedule example. Hnr block taxes   Spruce Co. Hnr block taxes is a monthly schedule depositor with seasonal employees. Hnr block taxes It paid wages each Friday during August but did not pay any wages during September. Hnr block taxes Under the monthly deposit schedule, Spruce Co. Hnr block taxes must deposit the combined tax liabilities for the four August paydays by September 15. Hnr block taxes Spruce Co. Hnr block taxes does not have a deposit requirement for September (due by October 15) because no wages were paid and, therefore, it did not have a tax liability for September. Hnr block taxes Semiweekly schedule example. Hnr block taxes   Green, Inc. Hnr block taxes is a semiweekly schedule depositor and pays wages once each month on the last Friday of the month. Hnr block taxes Although Green, Inc. Hnr block taxes , has a semiweekly deposit schedule, it will deposit just once a month because it pays wages only once a month. Hnr block taxes The deposit, however, will be made under the semiweekly deposit schedule as follows: Green, Inc. Hnr block taxes ’s tax liability for the April 25, 2014 (Friday), payday must be deposited by April 30, 2014 (Wednesday). Hnr block taxes Under the semiweekly deposit schedule, liabilities for wages paid on Wednesday through Friday must be deposited by the following Wednesday. Hnr block taxes $100,000 Next-Day Deposit Rule If you accumulate taxes of $100,000 or more on any day during a deposit period, you must deposit by the close of the next business day, whether you are a monthly or a semiweekly schedule depositor. Hnr block taxes For purposes of the $100,000 rule, do not continue accumulating taxes after the end of a deposit period. Hnr block taxes For example, if a semiweekly schedule depositor has accumulated taxes of $95,000 on Tuesday and $10,000 on Wednesday, the $100,000 next-day deposit rule does not apply because the $10,000 is accumulated in the next deposit period. Hnr block taxes Thus, $95,000 must be deposited by Friday and $10,000 must be deposited by the following Wednesday. Hnr block taxes However, once you accumulate at least $100,000 in a deposit period, stop accumulating at the end of that day and begin to accumulate anew on the next day. Hnr block taxes For example, Fir Co. Hnr block taxes is a semiweekly schedule depositor. Hnr block taxes On Monday, Fir Co. Hnr block taxes accumulates taxes of $110,000 and must deposit on Tuesday, the next business day. Hnr block taxes On Tuesday, Fir Co. Hnr block taxes accumulates additional taxes of $30,000. Hnr block taxes Because the $30,000 is not added to the previous $110,000 and is less than $100,000, Fir Co. Hnr block taxes does not have to deposit the $30,000 until Friday (following the semiweekly deposit schedule). Hnr block taxes If you are a monthly schedule depositor and you accumulate a $100,000 tax liability on any day during a month, you become a semiweekly schedule depositor on the next day and remain so for the remainder of the calendar year and for the following calendar year. Hnr block taxes Example. Hnr block taxes   Elm, Inc. Hnr block taxes started its business on May 1, 2014. Hnr block taxes On May 8, it paid wages for the first time and accumulated a tax liability of $40,000. Hnr block taxes On Friday, May 9, Elm, Inc. Hnr block taxes paid wages and accumulated a liability of $60,000, making its accumulated Form 941-SS tax liability total $100,000. Hnr block taxes Elm, Inc. Hnr block taxes must deposit $100,000 by Monday, May 12, the next business day. Hnr block taxes Because this was the first year of its business, the tax liability for its lookback period is considered to be zero, and it would be a monthly schedule depositor based on the lookback rules. Hnr block taxes However, because Elm, Inc. Hnr block taxes accumulated $100,000 on May 9, it became a semiweekly schedule depositor on May 10. Hnr block taxes It will be a semiweekly schedule depositor for the remainder of 2014 and for 2015. Hnr block taxes Accuracy of Deposits Rule You are required to deposit 100% of your tax liability on or before the deposit due date. Hnr block taxes However, penalties will not be applied for depositing less than 100% if both of the following conditions are met. Hnr block taxes Any deposit shortfall does not exceed the greater of $100 or 2% of the amount of taxes otherwise required to be deposited, and The deposit shortfall is paid or deposited by the shortfall makeup date as described below. Hnr block taxes Makeup date for deposit shortfall: Monthly schedule depositor. Hnr block taxes Deposit or pay the shortfall by the due date of your Form 941-SS, 944, or 943 for the period in which the shortfall occurred. Hnr block taxes You may pay the shortfall with your return even if the amount is $2,500 or more. Hnr block taxes Semiweekly schedule depositor. Hnr block taxes Deposit by the earlier of: The first Wednesday or Friday (whichever comes first) that comes on or after the 15th of the month following the month in which the shortfall occurred, or The return due date for the period in which the shortfall occurred. Hnr block taxes For example, if a semiweekly schedule depositor filing Form 941-SS has a deposit shortfall during July 2014, the shortfall makeup date is August 15, 2014 (Friday). Hnr block taxes However, if the shortfall occurred on the required April 2 (Wednesday), deposit date for a March 28 (Friday) pay date, the return due date for the March 28 pay date (April 30) would come before the May 16 (Friday) shortfall makeup date. Hnr block taxes In this case, the shortfall must be deposited by April 30, 2014. Hnr block taxes Employers of Both Farm and Nonfarm Workers If you employ both farm and nonfarm workers, you must treat employment taxes for the farmworkers (Form 943 taxes) separately from employment taxes for the nonfarm workers (Form 941-SS or 944 taxes). Hnr block taxes Form 943 taxes and Form 941-SS (or Form 944) taxes are not combined for purposes of applying any of the deposit rules. Hnr block taxes If a deposit is due, deposit the Form 941-SS (or Form 944) taxes and Form 943 taxes separately, as discussed next. Hnr block taxes How To Deposit You must deposit employment taxes by electronic funds transfer. Hnr block taxes See Payment with Return , earlier in this section, for exceptions explaining when taxes may be paid with the tax return instead of being deposited. Hnr block taxes Electronic deposit requirement. Hnr block taxes   You must use electronic funds transfer to make all federal tax deposits (such as deposits of employment tax, excise tax, and corporate income tax). Hnr block taxes Generally, electronic fund transfers are made using the Electronic Federal Tax Payment System (EFTPS). Hnr block taxes If you do not want to use EFTPS, you can arrange for your tax professional, financial institution, payroll service, or other trusted third party to make electronic deposits on your behalf. Hnr block taxes   EFTPS is a free service provided by the Department of the Treasury. Hnr block taxes To get more information or to enroll in EFTPS, call 1-800-555-4477 (U. Hnr block taxes S. Hnr block taxes Virgin Islands only) or 303-967-5916 (toll call). Hnr block taxes You can also visit the EFTPS website at www. Hnr block taxes eftps. Hnr block taxes gov. Hnr block taxes Additional information about EFTPS is also available in Publication 966. Hnr block taxes When you receive your EIN. Hnr block taxes   If you are a new employer that indicated a federal tax obligation when requesting an EIN, you will be pre-enrolled in EFTPS. Hnr block taxes You will receive information about Express Enrollment in your Employer Identification Number (EIN) Package and an additional mailing containing your EFTPS personal identification number (PIN) and instructions for activating your PIN. Hnr block taxes Follow the steps in your “How to Activate Your Enrollment” brochure to activate your enrollment and begin making your payroll tax deposits. Hnr block taxes If you outsource any of your payroll and related tax duties to a third party payer, such as a payroll service provider or reporting agent, be sure to tell them about your EFTPS enrollment. Hnr block taxes Deposit record. Hnr block taxes   For your records, an Electronic Funds Transfer (EFT) Trace Number will be provided with each successful payment. Hnr block taxes The number can be used as a receipt or to trace the payment. Hnr block taxes Depositing on time. Hnr block taxes   For deposits made by EFTPS to be on time, you must initiate the deposit by 8 p. Hnr block taxes m. Hnr block taxes Eastern time the day before the date the deposit is due. Hnr block taxes If you use a third party to make deposits on your behalf, they may have different cutoff times. Hnr block taxes Same-day payment option. Hnr block taxes   If you fail to initiate a deposit transaction on EFTPS by 8 p. Hnr block taxes m. Hnr block taxes Eastern time the day before the date a deposit is due, you can still make your deposit on time by using the Federal Tax Application (FTA). Hnr block taxes To use the same-day payment method, you will need to make arrangements with your financial institution ahead of time. Hnr block taxes Please check with your financial institution regarding availability, deadlines, and costs. Hnr block taxes Your financial institution may charge you a fee for payments made this way. Hnr block taxes To learn more about the information you will need to provide your financial institution to make a same-day wire payment, please visit www. Hnr block taxes eftps. Hnr block taxes gov to download the Same-Day Payment Worksheet. Hnr block taxes How to claim credit for overpayments. Hnr block taxes   If you deposited more than the right amount of taxes for a tax period, you can choose on Form 941-SS, 941, 944, or 943 for that tax period to have the overpayment refunded or applied as a credit to your next return. Hnr block taxes Do not ask EFTPS to request a refund from the IRS for you. Hnr block taxes Deposit Penalties Penalties may apply if you do not make required deposits on time or if you make deposits of less than the required amount. Hnr block taxes The penalties do not apply if any failure to make a proper and timely deposit was due to reasonable cause and not to willful neglect. Hnr block taxes The IRS may also waive penalties if you inadvertently fail to deposit in the first quarter that a deposit is due, or the first quarter during which your frequency of deposits changed, if you timely filed your employment tax return. Hnr block taxes For amounts not properly or timely deposited, the penalty rates are as follows. Hnr block taxes 2% - Deposits made 1 to 5 days late. Hnr block taxes 5% - Deposits made 6 to 15 days late. Hnr block taxes 10% - Deposits made 16 or more days late. Hnr block taxes Also applies to amounts paid within 10 days of the date of the first notice that the IRS sent asking for the tax due. Hnr block taxes 10% - Amounts (that should have been deposited) paid directly to the IRS or paid with your tax return (but see Payment with Return , earlier in this section, for exceptions). Hnr block taxes 15% - Amounts still unpaid more than 10 days after the date of the first notice that the IRS sent asking for the tax due or the day on which you received notice and demand for immediate payment, whichever is earlier. Hnr block taxes Late deposit penalty amounts are determined using calendar days, starting from the due date of the liability. Hnr block taxes Special rule for former Form 944 filers. Hnr block taxes    If you filed Form 944 for the prior year and must file Forms 941-SS for the current year because your employment tax liability for the prior year exceeded the Form 944 eligibility requirement ($1,000 or less), the failure-to-deposit penalty will not apply to a late deposit of employment taxes for the first month of the current year if the taxes are deposited in full by March 15 of the current year. Hnr block taxes Order in which deposits are applied. Hnr block taxes   Deposits generally are applied to the most recent tax liability within the return period (quarter or year). Hnr block taxes However, if you receive a failure-to-deposit penalty notice, you may designate how your payment is to be applied in order to minimize the amount of the penalty, if you do so within 90 days of the date of the notice. Hnr block taxes Follow the instructions on the penalty notice that you received. Hnr block taxes For more information on designating deposits, see Revenue Procedure 2001-58. Hnr block taxes You can find Revenue Procedure 2001-58 on page 579 of Internal Revenue Bulletin 2001-50 at www. Hnr block taxes irs. Hnr block taxes gov/pub/irs-irbs/irb01-50. Hnr block taxes pdf. Hnr block taxes Example. Hnr block taxes Cedar, Inc. Hnr block taxes is required to make a deposit of $1,000 on July 15 and $1,500 on August 15. Hnr block taxes It does not make the deposit on July 15. Hnr block taxes On August 15, Cedar, Inc. Hnr block taxes deposits $2,000. Hnr block taxes Under the deposits rule, which applies deposits to the most recent tax liability, $1,500 of the deposit is applied to the August 15 deposit and the remaining $500 is applied to the July deposit. Hnr block taxes Accordingly, $500 of the July 15 liability remains undeposited. Hnr block taxes The penalty on this underdeposit will apply as explained earlier. Hnr block taxes Trust fund recovery penalty. Hnr block taxes   If federal income, social security, or Medicare taxes that must be withheld are not withheld or are not deposited or paid to the United States Treasury, the trust fund recovery penalty may apply. Hnr block taxes The penalty is the full amount of the unpaid trust fund tax. Hnr block taxes This penalty may apply to you if these unpaid taxes cannot be immediately collected from the employer or business. Hnr block taxes   The trust fund recovery penalty may be imposed on all persons who are determined by the IRS to be responsible for collecting, accounting for, and paying over these taxes, and who acted willfully in not doing so. Hnr block taxes   A responsible person can be an officer or employee of a corporation, a partner or employee of a partnership, an accountant, a volunteer director/trustee, or an employee of a sole proprietorship, or any other person or entity that is responsible for collecting, accounting for, and paying over trust fund taxes. Hnr block taxes A responsible person also may include one who signs checks for the business or otherwise has authority to cause the spending of business funds. Hnr block taxes    Willfully means voluntarily, consciously, and intentionally. Hnr block taxes A responsible person acts willfully if the person knows the required actions of collecting, accounting for or paying over trust fund taxes are not taking place, or recklessly disregards obvious and known risks to the government's right to receive trust fund taxes. Hnr block taxes “Averaged” failure-to-deposit penalty. Hnr block taxes   The IRS may assess an “averaged” failure-to-deposit (FTD) penalty of 2% to 10% if you are a monthly schedule depositor and did not properly complete Form 941-SS, line 14, when your tax liability shown on Form 941-SS, line 10, was $2,500 or more. Hnr block taxes IRS may also assess this penalty of 2% to 10% if you are a semiweekly schedule depositor and your tax liability shown on Form 941-SS, line 10, was $2,500 or more and you did any of the following. Hnr block taxes Completed Form 941-SS, line 14, instead of Schedule B (Form 941). Hnr block taxes Failed to attach a properly completed Schedule B (Form 941). Hnr block taxes Completed Schedule B (Form 941) incorrectly, for example, by entering tax deposits instead of tax liabilities in the numbered spaces. Hnr block taxes   The IRS figures the penalty by allocating your total tax liability shown on Form 941-SS, line 10, equally throughout the tax period. Hnr block taxes Your deposits and payments may not be counted as timely because IRS does not know the actual dates of your tax liabilities. Hnr block taxes   You can avoid the penalty by reviewing your return before filing it. Hnr block taxes Follow these steps before filing your Form 941-SS. Hnr block taxes If you are a monthly schedule depositor, report your tax liabilities (not your deposits) in the monthly entry spaces on Form 941-SS, line 14. Hnr block taxes If you are a semiweekly schedule depositor, report your tax liabilities (not your deposits) on Schedule B (Form 941) in the lines that represent the dates you paid your employees. Hnr block taxes Verify that your total liability shown on Form 941-SS, line 14, or the bottom of Schedule B (Form 941) equals your tax liability shown on Form 941-SS,  line 10. Hnr block taxes Do not show negative amounts on Form 941-SS, line 14, or Schedule B (Form 941). Hnr block taxes For prior period errors, do not adjust your tax liabilities reported on your current Form 941-SS, line 14, or on Schedule B (Form 941). Hnr block taxes Instead, file an adjusted return (Form 941-X (if you are adjusting a previously filed Form 941-SS) or Form 944-X (if you are adjusting a previously filed Form 944-SS or 944)) if you are also adjusting your tax liability. Hnr block taxes If you are only adjusting your deposits in response to a failure-to-deposit penalty notice, see the Instructions for Schedule B (Form 941) (if you previously filed Form 941-SS) or the Instructions for Form 944-X (if you previously filed Form 944-SS or 944). Hnr block taxes If you filed Form 944 for 2013 and line 7 was $2,500 or more, you were required to complete Form 944, lines 13a–13m, or attach Form 945-A, Annual Record of Federal Tax Liability. Hnr block taxes If you failed to complete lines 13a–13m, or failed to attach Form 945-A, whichever was required, IRS may assess an “averaged” failure-to-deposit (FTD) penalty. Hnr block taxes 9. Hnr block taxes Employer's Returns General instructions. Hnr block taxes   File Forms 941-SS (or Form 944) for nonfarm workers and Form 943 for farmworkers. Hnr block taxes (U. Hnr block taxes S. Hnr block taxes Virgin Islands employers may be required to file Form 940 for the combined wages of nonfarm workers and farmworkers. Hnr block taxes ) Employers with employees subject to U. Hnr block taxes S. Hnr block taxes income tax withholding. Hnr block taxes   If you have both employees who are subject to U. Hnr block taxes S. Hnr block taxes income tax withholding and employees who are not subject to U. Hnr block taxes S. Hnr block taxes income tax withholding, you must file only Form 941 (or Form 944) and include all your employees’ wages on that form. Hnr block taxes Nonfarm employers. Hnr block taxes   File Form 941-SS for the calendar quarter in which you first pay wages for nonfarm workers and for each quarter thereafter unless you are a seasonal employer or file a final return. Hnr block taxes Due dates for each quarter of the calendar year are as follows. Hnr block taxes Quarter Due Jan. Hnr block taxes , Feb. Hnr block taxes , Mar. Hnr block taxes Apr. Hnr block taxes 30 Apr. Hnr block taxes , May, June July 31 July, Aug. Hnr block taxes , Sept. Hnr block taxes Oct. Hnr block taxes 31 Oct. Hnr block taxes , Nov. Hnr block taxes , Dec. Hnr block taxes Jan. Hnr block taxes 31   However, if you deposited all taxes when due for the quarter, you have 10 additional days from the due dates to file the return. Hnr block taxes If the due date for filing your return falls on a Saturday, Sunday, or legal holiday, you may file on the next business day. Hnr block taxes   If you closed your business or stopped paying wages and do not have to file returns in the future, check the box on line 15 of your final Form 941-SS and show the date final wages were paid. Hnr block taxes Form 944. Hnr block taxes   If IRS notified you to file Form 944, file your 2013 Form 944 by January 31, 2014, or by February 10, 2014 (if you deposited all taxes when due). Hnr block taxes Household employers reporting social security and Medicare taxes. Hnr block taxes   If you are a sole proprietor and file Forms 941-SS (or Form 944) for business employees, you may include taxes for household employees on your Forms 941-SS (or Form 944). Hnr block taxes Otherwise, report social security and Medicare taxes for household employees on Schedule H (Form 1040), Household Employment Taxes. Hnr block taxes See Publication 926, Household Employer's Tax Guide, for more information. Hnr block taxes Employers of farmworkers. Hnr block taxes   Every employer of farmworkers must file a Form 943 for each calendar year beginning with the first year the employer pays $2,500 or more for farmwork or employs a farmworker who meets the $150 test described in section 6. Hnr block taxes   File a Form 943 each year for all taxable wages paid for farmwork. Hnr block taxes You may report household workers in a private home on a farm operated for profit on Form 943. Hnr block taxes Do not report wages for farmworkers on Form 941-SS or 944. Hnr block taxes   Send Form 943 to the IRS by January 31 of the following year. Hnr block taxes Send it with payment of any taxes due that you are not required to deposit. Hnr block taxes If you deposited all taxes when due, you have 10 additional days to file. Hnr block taxes Penalties. Hnr block taxes   For each whole or part month that a return is not filed when required (disregarding any extensions of the filing deadline), there is a failure-to-file penalty of 5% of the unpaid tax due with that return. Hnr block taxes The maximum penalty is generally 25% of the tax due. Hnr block taxes Also, for each whole or part month that the tax is paid late (disregarding any extensions of the payment deadline), there is a failure-to-pay penalty of 0. Hnr block taxes 5% per month of the amount of tax. Hnr block taxes For individual filers only, the failure-to-pay penalty is reduced from 0. Hnr block taxes 5% per month to 0. Hnr block taxes 25% per month if an installment agreement is in effect. Hnr block taxes You must have filed your return on or before the due date of the return to qualify for the reduced penalty. Hnr block taxes The maximum amount of the failure-to-pay penalty is also 25% of the tax due. Hnr block taxes If both penalties apply in any month, the failure-to-file penalty is reduced by the amount of the failure-to-pay penalty. Hnr block taxes The penalties will not be charged if you have a reasonable cause for failing to file or pay. Hnr block taxes If you receive a penalty notice, you can provide an explanation of why you believe reasonable cause exists. Hnr block taxes Reporting Adjustments to Form 941-SS, 944-SS, 944, or 943 Current Period Adjustments Make current period adjustments for fractions of cents, sick pay, tips, and group-term life insurance on your Form 941-SS, 944, or 943. Hnr block taxes See the Instructions for Form 941-SS, Instructions for Form 944, or Instructions for Form 943 for information on how to report these adjustments. Hnr block taxes Prior Period Adjustments Forms for prior period adjustments. Hnr block taxes   Use Form 941-X or Form 944-X to make a correction after you discover an error on a previously filed Form 941 or Form 944. Hnr block taxes There are also Forms 943-X, 945-X, and CT-1X to report corrections on the corresponding returns. Hnr block taxes Form 941-X and Form 944-X also replace Form 843, Claim for Refund and Request for Abatement, for employers to request a refund or abatement of overreported employment taxes. Hnr block taxes Continue to use Form 843 when requesting a refund or abatement of assessed interest or penalties. Hnr block taxes See Revenue Ruling 2009-39, 2009-52 I. Hnr block taxes R. Hnr block taxes B. Hnr block taxes 951, for examples of how the interest-free adjustment and claim for refund rules apply in 10 different situations. Hnr block taxes You can find Revenue Ruling 2009-39, at www. Hnr block taxes irs. Hnr block taxes gov/irb/2009-52_IRB/ar14. Hnr block taxes html. Hnr block taxes Background. Hnr block taxes   Treasury Decision 9405 changed the process for making interest-free adjustments to employment taxes reported on Forms 941-SS, 943, 944-SS, and 944, and for filing a claim for refund of employment taxes. Hnr block taxes Treasury Decision 9405, 2008-32 I. Hnr block taxes R. Hnr block taxes B. Hnr block taxes 293, is available at www. Hnr block taxes irs. Hnr block taxes gov/irb/2008-32_IRB/ar13. Hnr block taxes html. Hnr block taxes You will use the adjustment process if you underreported employment taxes and are making a payment, or if you overreported employment taxes and will be applying the credit to the Form 941-SS, 943, or 944 period during which you file Forms 941-X, 943-X, or 944-X, respectively. Hnr block taxes You will use the claim process if you overreported employment taxes and are requesting a refund or abatement of the overreported amount. Hnr block taxes We use the terms “correct” and “corrections” to include interest-free adjustments under sections 6205 and 6413, and claims for refund and abatement under sections 6402, 6414, and 6404 of the Internal Revenue Code. Hnr block taxes Correcting employment taxes. Hnr block taxes   When you discover an error on a previously filed Form 941-SS, 943, 944-SS, or 944, you must: Correct that error using Form 941-X, Form 943-X, or Form 944-X, File a separate Form 941-X, Form 943-X, or Form 944-X for
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The Hnr Block Taxes

Hnr block taxes 5. Hnr block taxes   Excise Taxes Table of Contents Introduction Topics - This chapter discusses: Useful Items - You may want to see: Prohibited Tax Shelter TransactionsEntity Level Tax Excess Benefit TransactionsTax on Disqualified Persons Tax on Organization Managers Excess Benefit Transaction Excess Business Holdings Taxable Distributions of Sponsoring Organizations Exception. Hnr block taxes A donor advised fund does not include: Taxes on Prohibited Benefits Resulting From Donor Advised Fund Distributions Excise Taxes on Private Foundations Excise Taxes on Black Lung Benefit Trusts Excise Tax on Failure to Meet the Community Health Needs Assessment Requirements Introduction An excise tax may be imposed on certain tax-exempt organizations. Hnr block taxes Topics - This chapter discusses: Prohibited tax shelter transactions Excess benefit transactions Excess business holdings Taxable distributions of sponsoring organizations Taxes on prohibited benefits distributed from donor advised funds Excise taxes on private foundations Excise taxes on 501(c)(21) black lung benefit trusts Excise Tax on Failure to Meet the Community Health Needs Assessment Requirements of Hospitals Useful Items - You may want to see: Forms (and Instructions) 4720 Return of Certain Excise Taxes Under Chapters 41 and 42 of the Internal Revenue Code See chapter 6 for more information about getting Form 4720. Hnr block taxes Prohibited Tax Shelter Transactions Section 4965 imposes an excise tax on: Certain tax-exempt entities that are party to prohibited tax shelter transactions, and Any entity manager who approves or otherwise causes the entity to be a party to a prohibited tax shelter transaction and knows or has reason to know that the transaction is a prohibited tax shelter transaction. Hnr block taxes  Additionally, section 6033 provides new disclosure requirements on a tax-exempt entity that is a party to a prohibited tax shelter transaction. Hnr block taxes Tax-exempt entities. Hnr block taxes   Tax-exempt entities that are subject to section 4965 include: Entities described in section 501(c), including but not limited to the following common types of entities: Instrumentalities of the United States described in section 501(c)(1); Churches, hospitals, museums, schools, scientific research organizations, and other charities described in section 501(c)(3); Civic leagues, social welfare organizations, and local associations of employees described in section 501(c)(4); Labor, agricultural, or horticultural organizations described in section 501(c)(5); Business leagues, chambers of commerce, trade associations, and other organizations described in section 501(c)(6); Voluntary employees' beneficiary associations (VEBAs) described in section 501(c)(9); Credit unions described in section 501(c)(14); Insurance companies described in section 501(c)(15); and Veterans' organizations described in section 501(c)(19). Hnr block taxes Religious or apostolic associations or corporations described in section 501(d). Hnr block taxes Entities described in section 170(c), including states, possessions of the United States, the District of Columbia, political subdivisions of states and political subdivisions of possessions of the United States (but not including the United States). Hnr block taxes Indian tribal governments within the meaning of section 7701(a)(40). Hnr block taxes Entity manager. Hnr block taxes    An entity manager is any person with authority or responsibility similar to that exercised by an officer, director, or trustee, and, for any act, the person that has authority or responsibility with respect to the prohibited transaction. Hnr block taxes Prohibited tax shelter transaction. Hnr block taxes   A prohibited tax shelter transaction is any listed transaction, within the meaning of section 6707A(c)(2), and any prohibited reportable transactions. Hnr block taxes A prohibited reportable transaction is a confidential transaction within the meaning of Regulations section 1. Hnr block taxes 6011-4(b)(3), and a transaction with contractual protection within the meaning of Regulations section 1. Hnr block taxes 6011-4(b)(4). Hnr block taxes See the Instructions for Form 8886 for more information on listed transactions and prohibited reportable transactions. Hnr block taxes Subsequently listed transaction. Hnr block taxes   Any transaction to which the tax-exempt entity is a party and is later determined to be a listed transaction after the entity has become a party to it, is a subsequently listed transaction. Hnr block taxes Entity Level Tax Section 4965(a)(1) imposes an entity level excise tax on any tax-exempt entity described in 1, 2, 3, or 4 above that becomes a party to a prohibited tax shelter transaction or is a party to a subsequently listed transaction (defined earlier). Hnr block taxes The excise tax imposed on a tax-exempt entity applies to tax years in which the entity becomes a party to the prohibited tax shelter transaction and any subsequent tax years. Hnr block taxes The amount of the excise tax depends on whether the tax-exempt entity knew or had reason to know that the transaction was a prohibited tax shelter transaction at the time it became a party to the transaction. Hnr block taxes To figure and report the excise tax imposed on a tax-exempt entity for being a party to a prohibited tax shelter transaction, file Form 4720. Hnr block taxes For more information about this excise tax, including information about how it is figured, see the Instructions for Form 4720. Hnr block taxes Manager Level Tax Section 4965(a)(2) imposes an excise tax on any tax-exempt entity manager who approves or otherwise causes the entity to be a party to a prohibited tax shelter transaction and knows (or has reason to know) that the transaction is a prohibited tax shelter transaction. Hnr block taxes The excise tax, in the amount of $20,000, is assessed for each approval or other act causing the organization to be a party to the prohibited tax shelter transaction. Hnr block taxes To report this tax, file Form 4720. Hnr block taxes Excess Benefit Transactions Excise tax on excess benefit transactions. Hnr block taxes   A disqualified person who benefits from an excess benefit transaction, such as compensation, fringe benefits, or contract payments from certain section 501(c)(3), 501(c)(4), or 501(c)(29) organizations, must correct the transaction and may have to pay an excise tax under section 4958. Hnr block taxes A manager of the organization may also have to pay an excise tax under section 4958. Hnr block taxes These taxes are reported on Form 4720. Hnr block taxes   The excise taxes are imposed if an applicable tax-exempt organization provides an excess benefit to a disqualified person and that benefit exceeds the value of the benefit received in exchange. Hnr block taxes   There are three taxes under section 4958. Hnr block taxes Disqualified persons are liable for the first two taxes and certain organization managers are liable for the third tax. Hnr block taxes    Taxes imposed on excess benefit transactions do not apply to a transaction under a written contract that was binding on September 13, 1995, and at all times thereafter before the transaction occurred. Hnr block taxes Tax on Disqualified Persons An excise tax equal to 25% of the excess benefit is imposed on each excess benefit transaction between an applicable tax-exempt organization and a disqualified person. Hnr block taxes The disqualified person who benefited from the transaction is liable for the tax. Hnr block taxes See definition of Disqualified person, later at Disqualified person. Hnr block taxes Additional tax on the disqualified person. Hnr block taxes   If the 25% tax is imposed and the excess benefit transaction is not corrected within the taxable period, an additional excise tax equal to 200% of the excess benefit is imposed on any disqualified person involved. Hnr block taxes   If a disqualified person makes a payment of less than the full correction amount, the 200% tax is imposed only on the unpaid portion of the correction amount. Hnr block taxes If more than one disqualified person received an excess benefit from an excess benefit transaction, all such disqualified persons are jointly and severally liable for the taxes. Hnr block taxes   To avoid the 200% tax, a disqualified person must correct the excess benefit transaction during the taxable period. Hnr block taxes The 200% tax is abated (refunded if collected) if the excess benefit transaction is corrected within a 90-day correction period beginning on the date a statutory notice of deficiency is issued. Hnr block taxes Taxable period. Hnr block taxes   The taxable period means the period beginning with the date on which the excess benefit transaction occurs and ending on the earlier of: The date a notice of deficiency was mailed to the disqualified person for the initial tax on the excess benefit transaction, or The date on which the initial tax on the excess benefit transaction for the disqualified person is assessed. Hnr block taxes Tax on Organization Managers If tax is imposed on a disqualified person for any excess benefit transaction, an excise tax equal to 10% of the excess benefit is imposed on an organization manager who knowingly participated in an excess benefit transaction, unless such participation was not willful and was due to reasonable cause. Hnr block taxes This tax cannot exceed $20,000 ($10,000 for transactions entered in a tax year beginning before August 18, 2006), for each transaction. Hnr block taxes There is also joint and several liability for this tax. Hnr block taxes A person can be liable for both the tax paid by the disqualified person and the organization manager tax for a particular excess benefit transaction. Hnr block taxes Organization Manager. Hnr block taxes   An organization manager is any officer, director, or trustee of an applicable tax-exempt organization, or any individual having powers or responsibilities similar to officers, directors, or trustees of the organization, regardless of title. Hnr block taxes An organization manager is not considered to have participated in an excess benefit transaction where the manager has opposed the transaction in a manner consistent with the fulfillment of the manager's responsibilities to the organization. Hnr block taxes For example, a director who votes against giving an excess benefit would ordinarily not be subject to the 10% tax. Hnr block taxes A person participates in a transaction knowingly if the person: Has actual knowledge of sufficient facts so that, based solely upon those facts, such transaction would be an excess benefit transaction; Is aware that such a transaction under these circumstances may violate the provisions of federal tax law governing excess benefit transactions; and Negligently fails to make reasonable attempts to ascertain whether the transaction is an excess benefit transaction, or the manager is in fact aware that it is such a transaction. Hnr block taxes Knowing does not mean having reason to know. Hnr block taxes The organization manager ordinarily will not be considered knowing if, after full disclosure of the factual situation to an appropriate professional, the organization manager relied on the professional's reasoned written opinion on matters within the professional's expertise or if the manager relied on the fact that the requirements for the rebuttable presumption of reasonableness have been satisfied. Hnr block taxes Participation by an organization manager is willful if it is voluntary, conscious, and intentional. Hnr block taxes An organization manager's participation is due to reasonable cause if the manager has exercised responsibility on behalf of the organization with ordinary business care and prudence. Hnr block taxes Excess Benefit Transaction An excess benefit transaction is a transaction in which an economic benefit is provided by an applicable tax-exempt organization, directly or indirectly, to or for the use of any disqualified person, and the value of the economic benefit provided by the organization exceeds the value of the consideration (including the performance of services) received for providing such benefit. Hnr block taxes The excess benefit transaction rules apply to all transactions with disqualified persons, regardless of whether the amount of the benefit provided is determined in whole or in part by the revenues of one or more activities of the organization. Hnr block taxes To determine whether an excess benefit transaction has occurred, all consideration and benefits exchanged between a disqualified person and the applicable tax-exempt organization, and all entities it controls, are taken into account. Hnr block taxes For purposes of determining the value of economic benefits, the value of property, including the right to use property, is the fair market value. Hnr block taxes Fair market value is the price at which property, or the right to use property, would change hands between a willing buyer and a willing seller, neither being under any compulsion to buy, sell, or transfer property or the right to use property, and both having reasonable knowledge of relevant facts. Hnr block taxes Donor advised fund transactions occurring after August 17, 2006. Hnr block taxes   For a donor advised fund, an excess benefit transaction includes a grant, loan, compensation, or other similar payment from the fund to a: Donor or donor advisor, Family member of a donor, or donor advisor, 35% controlled entity of a donor, or donor advisor, or 35% controlled entity of a family member of a donor, or donor advisor. Hnr block taxes   The excess benefit in this transaction is the amount of the grant, loan, compensation, or other similar payment. Hnr block taxes For additional information, see the Instructions for Form 4720. Hnr block taxes Supporting organization transactions occurring after July 25, 2006. Hnr block taxes   For any supporting organization, defined in section 509(a)(3), an excess benefit transaction includes grants, loans, compensation, or other similar payment provided by the supporting organization to a: Substantial contributor, Family member of a substantial contributor, 35% controlled entity of a substantial contributor, or 35% controlled entity of a family member of a substantial contributor. Hnr block taxes   Additionally, an excess benefit transaction includes any loans provided by the supporting organization to a disqualified person (other than an organization described in section 509(a)(1), (2), or (4)). Hnr block taxes   The excess benefit for substantial contributors and parties related to those contributors includes the amount of the grant, loan, compensation, or other similar payment. Hnr block taxes For additional information, see the Instructions for Form 4720. Hnr block taxes   Excess benefit transaction rules generally do not apply to transactions between a supporting organization and its supported organization described in section 501(c)(4), (5), or (6) in furtherance of charitable purposes. Hnr block taxes Date of Occurrence An excess benefit transaction occurs on the date the disqualified person receives the economic benefit from the organization for federal income tax purposes. Hnr block taxes However, when a single contractual arrangement provides for a series of compensation or other payments to or for the use of a disqualified person during the disqualified person's tax year, any excess benefit transaction with respect to these payments occurs on the last day of the taxpayer's tax year. Hnr block taxes In the case of benefits provided to a qualified pension, profit-sharing, or stock bonus plan, the transaction occurs on the date the benefit is vested. Hnr block taxes In the case of the transfer of property subject to a substantial risk of forfeiture, or in the case of rights to future compensation or property, the transaction occurs on the date the property, or the rights to future compensation or property, is not subject to a substantial risk of forfeiture. Hnr block taxes Where the disqualified person elects to include an amount in gross income in the tax year of transfer under section 83(b), the excess benefit transaction occurs on the date the disqualified person receives the economic benefit for federal income tax purposes. Hnr block taxes Correcting the excess benefit. Hnr block taxes   An excess benefit transaction is corrected by undoing the excess benefit to the extent possible, and by taking any additional measures necessary to place the organization in a financial position not worse than what it would have been if the disqualified person were dealing under the highest fiduciary standards. Hnr block taxes   A disqualified person corrects an excess benefit by making a payment in cash or cash equivalents, excluding payment by a promissory note, equal to the correction amount to the applicable tax-exempt organization. Hnr block taxes The correction amount equals the excess benefit plus the interest on the excess benefit. Hnr block taxes The interest rate can be no lower than the applicable federal rate, compounded annually, for the month the transaction occurred. Hnr block taxes   A disqualified person can, with the agreement of the applicable tax-exempt organization, make a payment by returning the specific property previously transferred in the excess transaction. Hnr block taxes In this case, the disqualified person is treated as making a payment equal to the lesser of: The fair market value of the property on the date the property is returned to the organization, or The fair market value of the property on the date the excess benefit transaction occurred. Hnr block taxes   If the payment resulting from the return of property is less than the correction amount, the disqualified person must make an additional cash payment to the organization equal to the difference. Hnr block taxes   If the payment resulting from the return of the property exceeds the correction amount described above, the organization can make a cash payment to the disqualified person equal to the difference. Hnr block taxes Exception. Hnr block taxes   For a correction of an excess benefit transaction (discussed earlier), no amount repaid in a manner prescribed by the Secretary can be held in a donor advised fund. Hnr block taxes Applicable Tax-Exempt Organization An applicable tax-exempt organization is a section 501(c)(3), 501(c)(4), or 501(c)(29) organization that is tax-exempt under section 501(a), or was such an organization at any time during a 5-year period ending on the day of the excess benefit transaction. Hnr block taxes An applicable tax-exempt organization does not include: A private foundation as defined in section 509(a), A governmental entity that is: Exempt from (or not subject to) taxation without regard to section 501(a), or Not required to file an annual return, or A foreign organization, recognized by the IRS or by treaty, that receives substantially all of its support (other than gross investment income) from sources outside the United States. Hnr block taxes An organization is not treated as a section 501(c)(3), 501(c)(4), or 501(c)(29) organization for any period covered by a final determination that the organization was not tax-exempt under section 501(a), but only if the determination was not based on private inurement or one or more excess benefit transactions. Hnr block taxes Disqualified Person A disqualified person is: Any person (at any time during the 5-year period ending on the date of the transaction) in a position to exercise substantial influence over the affairs of the organization, A family member of an individual described in 1, and A 35% controlled entity. Hnr block taxes For donor advised funds, sponsoring organizations, and certain supporting organizations occurring after August 17, 2006. Hnr block taxes   The following persons will be considered disqualified persons along with certain family members and 35% controlled entities associated with them. Hnr block taxes Donors of donor advised funds, Investment advisors of sponsoring organizations, and Disqualified persons of a section 509(a)(3) supporting organization that supports the applicable tax-exempt organization. Hnr block taxes For certain supporting organization transactions occurring after July 25, 2006. Hnr block taxes   Substantial contributors to supporting organizations will also be considered disqualified persons with respect to the supporting organizations, along with their family members and 35% controlled entities. Hnr block taxes Investment advisor. Hnr block taxes   Investment advisor means for any sponsoring organization, any person compensated by such organization (but not an employee of such organization) for managing the investment of, or providing investment advice for, assets maintained in donor advised funds owned by such sponsoring organization. Hnr block taxes Substantial contributor. Hnr block taxes   In general, a substantial contributor means any person who contributed or bequeathed an aggregate of more than $5,000 to the organization, if that amount is more than 2% of the total contributions and bequests received by the end of the organization's tax year in which the contribution or bequest is received. Hnr block taxes A substantial contributor includes the grantor of a trust. Hnr block taxes Family members. Hnr block taxes   Family members of a disqualified person include a disqualified person's spouse, brothers or sisters (whether by whole or half-blood), spouses of brothers or sisters (whether by whole or half-blood), ancestors, children (including a legally adopted child), grandchildren, great grandchildren, and spouses of children, grandchildren, and great grandchildren (whether by whole or half-blood). Hnr block taxes 35% controlled entity. Hnr block taxes   A 35% controlled entity is: A corporation in which disqualified persons own more than 35% of the total combined voting power, A partnership in which such persons own more than 35% of the profits interest, or A trust or estate in which such persons own more than 35% of the beneficial interest. Hnr block taxes   In determining the holdings of a business enterprise, any stock or other interest owned directly or indirectly shall apply. Hnr block taxes Persons having substantial influence. Hnr block taxes   Among those who are in a position to exercise substantial influence over the affairs of the organization are, for example, voting members of the governing body, and persons holding the power of: Presidents, chief executives, or chief operating officers. Hnr block taxes Treasurers and chief financial officers. Hnr block taxes Persons with a material financial interest in a provider-sponsored organization. Hnr block taxes Persons not considered to have substantial influence. Hnr block taxes   Persons who are not considered to be in a position to exercise substantial influence over the affairs of an organization include: An employee who receives benefits that total less than the highly compensated amount in section 414(q)(1)(B)(i) and who does not hold the executive or voting powers mentioned earlier in the discussion on Disqualified Person, is not a family member of a disqualified person, and is not a substantial contributor, Tax-exempt organizations described in section 501(c)(3), and Section 501(c)(4) organizations with respect to transactions engaged in with other section 501(c)(4) organizations. Hnr block taxes Facts and circumstances. Hnr block taxes   The determination of whether a person has substantial influence over the affairs of an organization is based on all the facts and circumstances. Hnr block taxes Facts and circumstances that tend to show a person has substantial influence over the affairs of an organization include, but are not limited to, the following. Hnr block taxes The person founded the organization. Hnr block taxes The person is a substantial contributor to the organization under the section 507(d)(2)(A) definition, only taking into account contributions to the organization for the past 5 years. Hnr block taxes The person's compensation is primarily based on revenues derived from activities of the organization that the person controls. Hnr block taxes The person has or shares authority to control or determine a substantial portion of the organization's capital expenditures, operating budget, or compensation for employees. Hnr block taxes The person manages a discrete segment or activity of the organization that represents a substantial portion of the activities, assets, income, or expenses of the organization, as compared to the organization as a whole. Hnr block taxes The person owns a controlling interest (measured by either vote or value) in a corporation, partnership, or trust that is a disqualified person. Hnr block taxes The person is a nonstock organization controlled directly or indirectly by one or more disqualified persons. Hnr block taxes   Facts and circumstances tending to show that a person does not have substantial influence over the affairs of an organization include, but are not limited to, the following. Hnr block taxes The person has taken a bona fide vow of poverty as an employee or agent of a religious organization or on its behalf. Hnr block taxes The person is an independent contractor whose sole relationship to the organization is providing professional advice (without having decision-making authority) with respect to transactions from which the independent contractor will not economically benefit either directly or indirectly aside from customary fees received for the professional advice rendered. Hnr block taxes Any preferential treatment the person receives based on the size of the person's donation is also offered to others making comparable widely solicited donations. Hnr block taxes The direct supervisor of the person is not a disqualified person. Hnr block taxes The person does not participate in any management decisions affecting the organization as a whole or a discrete segment of the organization that represents a substantial portion of the activities, assets, income, or expenses of the organization, as compared to the organization as a whole. Hnr block taxes   In the case of multiple organizations affiliated by common control or governing documents, the determination of whether a person does or does not have substantial influence is made separately for each applicable tax-exempt organization. Hnr block taxes A person may be a disqualified person with respect to transactions with more than one organization. Hnr block taxes Reasonable Compensation. Hnr block taxes    Reasonable compensation is the value that would ordinarily be paid for like services by like enterprises under like circumstances. Hnr block taxes The section 162 standard will apply in determining the reasonableness of compensation. Hnr block taxes The fact that a bonus or revenue-sharing arrangement is subject to a cap is a relevant factor in determining reasonableness of compensation. Hnr block taxes   To determine the reasonableness of compensation, all items of compensation provided by an applicable tax-exempt organization in exchange for performance of services are taken into account in determining the value of compensation (except for economic benefits that are disregarded under the discussion Disregarded benefits , later). Hnr block taxes Items of compensation include: All forms of cash and noncash compensation, including salary, fees, bonuses, severance payments, and deferred noncash compensation, The payment of liability insurance premiums for, or the payment or reimbursement by the organization of penalties, taxes, or certain expenses under section 4958, unless excludable from income as a de minimis fringe benefit under section 132(a)(4), All other compensatory benefits, whether or not included in gross income for income tax purposes, Taxable and nontaxable fringe benefits, except fringe benefits described in section 132, and Foregone interest on loans. Hnr block taxes    Intent to treat benefits as compensation. Hnr block taxes An economic benefit is not treated as consideration for the performance of services unless the organization providing the benefit clearly indicates its intent to treat the benefit as compensation when the benefit is paid. Hnr block taxes   An applicable tax-exempt organization (or entity that it controls) is treated as clearly indicating its intent to provide an economic benefit as compensation for services only if the organization provides written substantiation that is contemporaneous with the transfer of the economic benefits under consideration. Hnr block taxes Ways to provide contemporaneous written substantiation of its intent to provide an economic benefit as compensation include: The organization produces a signed written employment contract, The organization reports the benefit as compensation on an original Form W-2, Form 1099, or Form 990, or on an amended form filed before starting an IRS examination, or The disqualified person reports the benefit as income on the person's original Form 1040, or on an amended form filed before starting an IRS examination. Hnr block taxes Exception. Hnr block taxes   If the economic benefit is excluded from the disqualified person's gross income for income tax purposes, the applicable tax-exempt organization is not required to indicate its intent to provide an economic benefit as compensation for services. Hnr block taxes Rebuttable presumption that a transaction is not an excess benefit transaction. Hnr block taxes   Payments under a compensation arrangement are presumed to be reasonable and the transfer of property (or right to use property) is presumed to be at fair market value, if the following three conditions are met. Hnr block taxes The transaction is approved in advance by an authorized body of the organization (or an entity it controls) which is composed of individuals who do not have a conflict of interest concerning the transaction. Hnr block taxes Before making its determination, the authorized body obtained and relied upon appropriate data as to comparability. Hnr block taxes (There is a special safe harbor for small organizations. Hnr block taxes If the organization has gross receipts of less than $1 million, appropriate comparability data includes data on compensation paid by three comparable organizations in the same or similar communities for similar services. Hnr block taxes ) The authorized body adequately documents the basis for its determination concurrently with making that determination. Hnr block taxes The documentation should include: The terms of the approved transaction and the date approved, The members of the authorized body who were present during debate on the transaction that was approved and those who voted on it, The comparability data obtained and relied upon by the authorized body and how the data was obtained, Any actions by a member of the authorized body having conflict of interest, and Documentation of the basis of the determination before the later of the next meeting of the authorized body or 60 days after the final actions of the authorized body are taken, and approval of records as reasonable, accurate, and complete within a reasonable time thereafter. Hnr block taxes Disregarded benefits. Hnr block taxes   The following economic benefits are disregarded for section 4958 purposes. Hnr block taxes Nontaxable fringe benefits that are excluded from income under section 132. Hnr block taxes Benefits provided to a volunteer for the organization if the benefit is provided to the general public in exchange for a membership fee or contribution of $75 or less. Hnr block taxes Benefits provided to a member of an organization due to the payment of a membership fee or to a donor as a result of a deductible contribution, if a significant number of disqualified persons make similar payments or contributions and are offered a similar economic benefit. Hnr block taxes Benefits provided to a person solely as a member of a charitable class that the applicable tax-exempt organization intends to benefit as part of the accomplishment of its exempt purpose. Hnr block taxes A transfer of an economic benefit to or for the use of a governmental unit, as defined in section 170(c)(1), if exclusively for public purposes. Hnr block taxes Special Exception for Initial Contracts      Section 4958 does not apply to any fixed payment made to a person under an initial contract. Hnr block taxes   A fixed payment is an amount of cash or other property specified in the contract, or determined by a fixed formula that is specified in the contract, which is to be paid or transferred in exchange for the provision of specified services or property. Hnr block taxes   A fixed formula can, generally, incorporate an amount that depends upon future specified events or contingencies, as long as no one has discretion when calculating the amount of a payment or deciding whether to make a payment (such as a bonus). Hnr block taxes   An initial contract is a binding written contract between an applicable tax-exempt organization and a person who was not a disqualified person immediately before entering into the contract. Hnr block taxes   A binding written contract, providing it can be terminated or canceled by the applicable tax-exempt organization without the other party's consent (except as a result of substantial nonperformance) and without substantial penalty, is treated as a new contract, as of the earliest date any termination or cancellation would be effective. Hnr block taxes Also, if the parties make a material change to a contract, which includes an extension or renewal of the contract (except for an extension or renewal resulting from the exercise of an option by the disqualified person), or a more than incidental change to the amount payable under the contract, it is treated as a new contract as of the effective date of the material change. Hnr block taxes More information. Hnr block taxes   For more information, see the Instructions to Forms 990 and 4720. Hnr block taxes Excess Business Holdings Private foundations are generally not permitted to hold more than a 20% interest in an unrelated business enterprise. Hnr block taxes They may be subject to an excise tax on the amount of any excess business holdings. Hnr block taxes For purposes of section 4943, for tax years beginning after August 17, 2006, donor advised funds and certain supporting organizations are considered private foundations. Hnr block taxes Donor advised fund. Hnr block taxes   In general, a donor advised fund is a fund or account separately identified by reference to contributions of a donor or donors that is owned and controlled by a sponsoring organization and for which the donor has or expects to have advisory privileges concerning the distribution or investment of the funds. Hnr block taxes Supporting organizations. Hnr block taxes   Only certain supporting organizations are subject to the excess business holdings tax under section 4943. Hnr block taxes These include (1) Type III supporting organizations that are not functionally integrated and (2) Type II supporting organizations that accept any gift or contribution from a person who by himself or in connection with a related party controls the supported organization that the Type II supporting organization supports. Hnr block taxes Taxes. Hnr block taxes   A private foundation that has excess holdings in a business enterprise may become liable for an excise tax based on the amount of holdings. Hnr block taxes The initial tax is 10% (5% for tax years beginning before August 18, 2006) of the value of the excess holdings and is imposed on the last day of each tax year that ends during the taxable period. Hnr block taxes The excess holdings are determined on the day during the tax year when they were the largest. Hnr block taxes   A foundation that fails to correct the excess business holdings becomes liable for an additional tax of 200% of the remaining excess business holdings as of the earlier of tax assessment or mailing of a notice of deficiency. Hnr block taxes   For more information on the tax on excess business holdings, see the Instructions for Form 4720. Hnr block taxes Taxable Distributions of Sponsoring Organizations An excise tax is imposed on a sponsoring organization for each taxable distribution it makes from a donor advised fund. Hnr block taxes An excise tax is also imposed on any fund manager of the sponsoring organization who agreed to the making of a distribution, knowing that it is a taxable distribution. Hnr block taxes Taxable distribution. Hnr block taxes   A taxable distribution is any distribution from a donor advised fund to any natural person or to any other person if: The distribution is for any purpose other than one specified in section 170(c)(2)(B), or The sponsoring organization maintaining the donor advised fund does not exercise expenditure responsibility with respect to the distribution in accordance with section 4945(h). Hnr block taxes    However, a taxable distribution does not include a distribution from a donor advised fund to: Any organization described in section 170(b)(1)(A) (other than a disqualified supporting organization), The sponsoring organization of the donor advised fund, or Any other donor advised fund. Hnr block taxes The tax on taxable distributions applies to distributions occurring in tax years beginning after August 17, 2006. Hnr block taxes Sponsoring organization. Hnr block taxes   A sponsoring organization is a section 170(c) organization that is neither a government organization (as referred to in section 170(c)(1) and (2)(A)) nor a private foundation. Hnr block taxes Donor advised fund. Hnr block taxes    A donor advised fund is a fund or account: Which is separately identified by reference to contributions of a donor or donors, Which is owned and controlled by a sponsoring organization, and For which the donor (or any person appointed or designated by the donor) has or expects to have advisory privileges concerning the distribution or investment of the funds held in the donor advised funds or accounts because of the donor's status as a donor. Hnr block taxes Exception. Hnr block taxes A donor advised fund does not include:    A fund or account that makes distributions only to a single identified organization or governmental entity, or Any fund or account for a person described in 3 above that gives advice about which individuals receive grants for travel, study, or similar purposes, if the following three requirements are met: The person's advisory privileges are performed exclusively by such person in their capacity as a committee member of which all the committee members are appointed by the sponsoring organization, No combination of persons with advisory privileges, described in 3 above, or persons related to those in 3 above directly or indirectly control the committee, and All grants from the fund or account are awarded on an objective and nondiscriminatory basis according to a procedure approved in advance by the board of directors of the sponsoring organization. Hnr block taxes The procedure must be designed to ensure that all grants meet the requirements of section 4945(g)(1), (2), or (3). Hnr block taxes Disqualified supporting organization. Hnr block taxes   A disqualified supporting organization includes (1) a Type III supporting organization that is not functionally integrated and (2) any supporting organization where the donor or donor advisor (and any related parties) directly or indirectly controls a supported organization of the supporting organization. Hnr block taxes Tax on sponsoring organization. Hnr block taxes   A tax of 20% of the amount of each taxable distribution is imposed on the sponsoring organization. Hnr block taxes Tax on fund manager. Hnr block taxes   If a tax is imposed on a taxable distribution of the sponsoring organization, a tax of 5% of the distribution will be imposed on any fund manager who agreed to the distribution knowing that it was a taxable distribution. Hnr block taxes Any fund manager who took part in the distribution and is liable for the tax must pay the tax. Hnr block taxes The maximum amount of tax on all fund managers for any one taxable distribution is $10,000. Hnr block taxes If more than one fund manager is liable for tax on a taxable distribution, all such managers are jointly and severally liable for the tax. Hnr block taxes   For more information on the tax on taxable distributions of sponsoring organizations, see the Instructions for Form 4720. Hnr block taxes Taxes on Prohibited Benefits Resulting From Donor Advised Fund Distributions Prohibited benefit. Hnr block taxes   If any donor, donor advisor, or related party advises the sponsoring organization about making a distribution which results in a donor, donor advisor, or related party receiving (either directly or indirectly) a more than incidental benefit, then such benefit is a prohibited benefit. Hnr block taxes The tax on prohibited benefits applies to distributions occurring in tax years beginning after August 17, 2006. Hnr block taxes Donor advisor. Hnr block taxes   A donor advisor is any person appointed or designated by a donor to advise a sponsoring organization on the distribution or investment of amounts held in the donor's fund or account. Hnr block taxes Related party. Hnr block taxes   A related party includes any family member or 35% controlled entity. Hnr block taxes See the definition of those terms under Disqualified Person , earlier. Hnr block taxes Tax on donor, donor advisor, or related person. Hnr block taxes    A tax of 125% of the benefit resulting from the distribution is imposed on both the party who advised as to the distribution (which might be a donor, donor advisor, or related party) and the party who received such benefit (which might be a donor, donor advisor, or related party). Hnr block taxes The advisor and the party who received the benefit are jointly and severally liable for the tax. Hnr block taxes Tax on fund managers. Hnr block taxes   If a tax is imposed on a prohibited benefit received by a donor, donor advisor, or related person, a tax of 10% of the amount of the prohibited benefit is imposed on any fund manager who agreed to the distribution knowing that it would confer a prohibited benefit. Hnr block taxes Any fund manager who took part in the distribution and is liable for the tax must pay the tax. Hnr block taxes The maximum amount of tax on all fund managers for any one taxable distribution is $10,000. Hnr block taxes If more than one fund manager is liable for tax on a taxable distribution, all such managers are jointly and severally liable for the tax. Hnr block taxes Exception. Hnr block taxes   If a person engaged in an excess benefit transaction and received a prohibited benefit for the same transaction, the person is taxed under section 4958, and no tax is imposed under section 4967 for a prohibited benefit. Hnr block taxes   For more information on taxes on prohibited benefits distributed from donor advised funds, see the Instructions for Form 4720. Hnr block taxes Excise Taxes on Private Foundations There is an excise tax on the net investment income of most domestic private foundations. Hnr block taxes Capital gains from appreciation are included in the tax base on private foundation net investment income. Hnr block taxes This tax must be reported on Form 990-PF and must be paid annually at the time for filing that return or in quarterly estimated tax payments if the total tax for the year (section 4940 tax minus credits) is $500 or more. Hnr block taxes Form 990-W is used to calculate the estimated tax. Hnr block taxes In addition, there are several other rules that apply to excise taxes on private foundations. Hnr block taxes These include: Restrictions on self-dealing between private foundations and their substantial contributors and other disqualified persons, Requirements that the foundation annually distribute income for charitable purposes, Limits on their holdings in any business enterprise (see Excess Business Holdings, earlier), Provisions that investments must not jeopardize the carrying out of exempt purposes, and Provisions to assure that expenditures further the organization's exempt purposes. Hnr block taxes Violations of these provisions give rise to taxes and penalties against the private foundation and, in some cases, its managers, its substantial contributors, and certain related persons. Hnr block taxes For more information on the excise taxes imposed on private foundations, see the Instructions for Form 4720 and the Instructions for Form 990-PF. Hnr block taxes Excise Taxes on Black Lung Benefit Trusts A black lung benefit trust that makes any expenditures, payments, or investments other than those described in chapter 4 under 501(c)(21) - Black Lung Benefit Trusts must pay a tax equal to 10% of the amount of such expenditures. Hnr block taxes If there are any acts of self-dealing between the trust and a disqualified person, a tax equal to 10% of the amount involved is imposed on the disqualified person. Hnr block taxes Both of these excise taxes are reported on Schedule A (Form 990-BL). Hnr block taxes See the Form 990-BL instructions for more information on these taxes and what has to be filed, even if the trust is excepted from filing. Hnr block taxes Excise Tax on Failure to Meet the Community Health Needs Assessment Requirements For tax years beginning after March 23, 2012, new section 4959 imposes an excise tax on hospital organizations which fail to meet certain section 501(r) requirements for each of their hospital facilities. Hnr block taxes These entities must meet section 501(r)(3) requirements at all times during their tax year. Hnr block taxes Section 501(r)(3) requirements pertain to a hospital organization preparing a community health needs assessment (CHNA). Hnr block taxes See Schedule H, Hospitals (Form 990), for details. Hnr block taxes Prev  Up  Next   Home   More Online Publications